The quilting industry is small and close-knit. People who work in this industry are often not able to speak openly about a particular company or circumstance due to the risk that they may jeopardize their professional positions. In the course of my reporting, I interviewed sixteen people including shop owners, sales reps, former employees of RJR, designers, and fabric manufacturers and was able to corroborate the facts of this story, although few sources were willing or able to go on the record. I made multiple persistent efforts by phone and email over the course of a week to get in touch with both Richard Cohan and Marcello Colaruotolo for comment, but neither of them responded to my requests.

When I talked to Ted Hoffman, CEO of the Seattle-based fabric company, Clothworks, he was on a lunch break during an enterprise resource planning conference. “I’m here to learn about software,” he told me. Although he’s a fabric company executive he explains that software is his business.

“You need software to handle accounting, inventory, and receipts from the ports. How much inventory is pre-assigned and in what way? Understanding how sales are going is an absolute requirement,” he says. “Our system has real-time reporting capabilities. Sales and inventory reports run daily and get reviewed by about half dozen people. Things can spin out of control really fast. Without software, you’re dead.”

Not all fabric manufacturers have placed as much focused effort on software as Clothworks. At RJR out-of-date systems, a botched effort to update them, and a radical shift in leadership, created an unstable climate that caused the original five designers of industry darling, Cotton+Steel, to walk away earlier this month from the modern fabric division they’d built from scratch.

Founded in 1978 as an iteration of company president Richard Cohan’s family textile business, RJR is a traditional company run in an informal way. Cohan conducts business with handshake deals, and when Melody Miller proposed the idea of a modern fabric division in 2013 the company was functioning on a cobbled together software system that couldn’t generate the kinds of sales data Cotton+Steel needed for smart business planning. Cohan agreed it was time for an upgrade.

RJR hired Acumen Group to design an INFOR distribution software system for the company. This kind of software can manage inventory, warehouse, financials, orders, purchasing, and distribution. The initial six-month timeline for the project was drawn out repeatedly until the system was finally installed in October of 2016, but the implementation was disastrous. Sources familiar with to the situation were not clear whether the software itself was faulty, whether there was a lack of training on how to use it, or whether there was some other difficulty, but as months went by systems began to flounder and shop owners experienced frustration over not receiving their orders on time and complete.

“Kim Kight lives here in Austin and we were launching her new line,” says Nicole Labry, owner of The Cloth Pocket, a modern fabric shop on Lamar Boulevard. “We were the only store that was going to have it. She was coming to do a make-and-take here and we were having a party and we couldn’t get the fabric. It was crazy. Not getting my order was devastating.”

Rachael Gander owns the online fabric shop, Imagine Gnats. “It was always very unclear when things would happen, that was the most frustrating for me,” she says. “Fabric would be expected and I would have to call and ask where it was and they would give a random date. They would charge my card, and then I’d still be sitting around for weeks wondering where my fabric was.” She eventually gave up, as did large online retailer of modern quilting fabrics, Hawthorne Threads, who stopped ordering Cotton+Steel in August of 2017.

In an effort to correct the software debacle Cohan sought out the help of an outside firm who recommended a consultant named Marcello Colaruotolo. In July, Colaruotolo began working on the system Acumen had built, “hacking” it to better suit RJR’s needs. In August he was hired as a full-time employee and Cohan seemed to be thrilled.

Prior to RJR, Colaruotolo, 42, was the president of Infinigi, a solar panel company with a residential property listed as the address. Within a short period of time, his role and influence at RJR expanded exponentially. Colaruotolo is now the company’s Chief Financial Officer and Chief Operations Officer. His wife, Sanae Colaruotolo, has been hired by the company as well as his sister, Daniela Alexander.

By January 2018 RJR felt like a much different, and less secure, place than it had just four years earlier. Cotton+Steel had always been a strong and carefully crafted brand and staying at the company felt like putting all they had built at risk. It was time to go.

Although it was very difficult, the Cotton+Steel designers were not alone in their decision to leave. John Durnell, who had been Richard Cohan’s business partner since 1991, left RJR last week after 27 years with the company. Demetria Hayward, who served as vice president of marketing at RJR after working her way up over the course of 24 years with the company, left in April and now works at Moda. Several longtime sales reps have also moved on over the past few months.

From the very start, Cotton+Steel was a division of RJR and RJR owns it outright, including owning the trademark to the name. Although the five designers who founded the division have now left, the name and brand remain with the company. Still, because of their intense involvement in shaping every aspect of the brand from its inception, many in the quilting community struggle to imagine its future without them. “When I think of Cotton+Steel, that name conjures up in my mind a particular design aesthetic. I have no idea what the brand is apart from these designers,” says Lisa Hawkes of the online fabric store Pink Hollybush Designs.  “It makes no sense to me that RJR would let the designers go because I have no idea what Cotton+Steel is apart from them.”

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